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by Margaret Reuter
When Lawyers Have Unions: The Case of Legal Aid and Its Fight with the Mayor
(Nov-Dec '00) For the last 30 years New York City has contracted with the Legal Aid Society to defend indigent criminal defendants. Seven times over this period, Legal Aid attorneys have gone on strike. On October 1, 1994 they struck again. This is a story about how the city aggressively intervened in a labor negotiation between one of its contractors, and how Legal Aid and its union fought back.
When the collective bargaining agreement between the Legal Aid Society and its lawyers' union was about to expire, City Hall staff allegedly threatened to cancel its contract with Legal Aid if it considered any wage increase. Legal Aid assured the city that any increased costs would not be passed on to the city. The mayor was unmoved. The city was concerned about the impact of a wage increase on the city's forthcoming negotiations with its own unions. Fearful of the city's threat, Legal Aid refused the union's wage proposal.
On September 30, 1994 the labor contract expired. The next day, the attorneys went on strike. Four days later Legal Aid reached an agreement with the union.
The mayor was so piqued that he forced the Legal Aid Society to modify its city agreement to decree that the city has authority to hire other legal service providers and reduce Legal Aid payments commensurately. For the first time ever, the city invited other law firms to bid on contracts to provide indigent criminal defense. The invitation was issued in the form of three different "requests for proposals," the first two of which expressly forbade Legal Aid from submitting a bid. Legal Aid offered a proposal for the third, but it was rejected.
Legal Aid and its union separately filed lawsuits against the city and the new legal services providers, charging that the city interfered with their rights under the National Labor Relations Act, unconstitutionally retaliated against them for exercising their free speech rights, and violated state contracting rules by excluding Legal Aid, an objectively qualified provider, from competing for the contracts. The city asked US District Judge Sidney H. Stein to throw out the lawsuits, using various procedural and substantive arguments.
Judge Stein, however, ordered the city to go to trial over whether it violated Legal Aid and its union's free speech rights and whether it interfered with federal labor rights before and during the strike. The court found that the city's exclusion from the request for proposals was in retaliation for Legal Aid's labor negotiations with its union, and that the city was not acting merely as a market participant when it allegedly opposed any wage increase even if Legal Aid self-funded it.
Meg Sounds Off:
The city contracts with tens of thousands of companies and organizations every year. It rightfully cares about their labor costs. For the most part, a contractor's labor costs translates directly into the price the city will pay for the services it is contracting for. The city always reviews the cost of the contract bids, and always has the discretion to reject any bid that is just too expensive.
But the City's relationship with Legal Aid is far from the standard contracting relationship. Typically City Council enacts a budget in which each mayoral agency is provided an allotment. The agencies then determine what services they need to hire outside contractors to provide, and solicits potential contractors to "bid" on the project. The agency awards the contract to the organization with the best bid. For service contracts, as opposed to contracts for goods, the agencies consider both price and the quality of the bidders' proposals. Legal Aid's contract with the city, however, was funded directly through the city budget, where it never had to compete against other legal service providers and where the executive branch never had direct and exclusive control over the contract. The relationship is more akin to the funding of an agency, where the mayor approves every agency's budget, the number of employees, and even the salaries of any newly hired employees. But it is not the mayor who approves Legal Aid's budget, it is City Council.
Whatever the historical relationship the city has with the Legal Aid Society, it is wrong for the city to meddle in the labor relations of one of its contractors, especially where that contractor asserts that any increased labor costs will not be passed on to the city. The city's interests stop at reviewing the contractor's bid amount. Competition is one of the best tools to control contracting costs and it is prudent for the city to introduce competition into its provision of indigent legal services. But the city refused to let Legal Aid even compete and demonstrate how its labor costs were still a bargain for the city.
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